June 23, 2025 • 26 mins
Your morning briefing, the business news you need in just 15 minutes.
On today's podcast:
(1) The unprecedented US airstrikes on Iran have set traders and governments worldwide on edge, as the Islamic Republic warns of retaliation and Israel shows no sign of letting up in its assault.
(2) Iran warned there would be consequences for US strikes on its key nuclear sites and said it “reserves all options,” while showing restraint in its initial response.
(3) The US State Department issued a “Worldwide Caution” alert for American citizens, flagging the potential of travel disruptions and demonstrations following the US strikes on Iranian nuclear facilities.
(4) Oil jumped after the US struck Iran’s nuclear sites, stoking concerns that energy supplies from the Middle East could be disrupted.
(5) Two supertankers, each capable of hauling about 2 million barrels of crude, U-turned in the Strait of Hormuz after US airstrikes on Iran raised the risk of a response that would ensnare commercial shipping in the region.
(6) The UK said its military wasn’t involved in American air strikes on Iran, although a cabinet minister expressed support for their results
Bloomberg Opinion:
+ To a President With a Midnight Hammer, Everything Is a Nail
+ The US Has Two Paths in Iran. Tehran’s Clerics Will Decide Both.
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Transcript
Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:10):
This is the Bloomberg Daybreak cur podcast, available every morning
on Apple, Spotify or wherever you listen. It's Monday, the
twenty third of June. Here in London, I'm Caroline Hepka.
Coming up today. Iran warns all options for retaliation are
on the table following US strikes on its nuclear facilities.
Questions grow over President Trump's claimed that the attack totally
(00:32):
obliterated tey RAN's atomic program and crude spikes as two
supertankers U turn in the strait of Hall moves and
market's watch for signs of escalation. Let's start with a
roundup of our top stories. Unprecedented US air strikes against
Iran's nuclear facilities over the weekend have set traders and
(00:52):
governments across the globe on edge. The large scale American
operation targeted nuclear facilities at four dough Natal and Isfahan
in a thirty seven hour operation that included one hundred
and twenty five aircraft, submarine launched Tomahawk missiles, and the
first combat use of the US's thirty thousand pounds massive
(01:14):
ordnance penetrator bombs. Iran's Atomic Energy Agency described the US
strikes as a savage assault, but pledged not to abandon
its own nuclear work and speaking yesterday, Iran's Foreign minster
Abbas Aracchi said all options for a response are on
the table.
Speaker 3 (01:33):
The United States itself has now also opted for a
dangerous military operation and aggression against the people of Iran.
In doing so, the US administrations holds soul and full
responsibility for the consequences of its actions, including the Islamic
Republic of Iran's right to self defense under the principles
(01:56):
of the United Charter.
Speaker 2 (01:58):
Those words from the Iranian fi minister were followed by
further comments from the country's ambassador to the UN, Amir Said.
Iravani told an Emergency Security Council meeting that the timing,
nature and scale of Tehran's response will be decided by
its armed forces well. The US has warned all American
(02:19):
citizens abroad to be wary of protests and travel disruption.
The State Department issued a worldwide caution alert after the strikes,
saying in a statement, there is the potential for demonstrations
against US citizens and interests abroad. And on Fox News
Sunday's Morning Futures program, US sectory of Saint Marco Rubio
(02:40):
warned Iran against retaliation.
Speaker 4 (02:43):
If they retaliate, it'll be the worst mistake they've ever made.
Speaker 5 (02:46):
Look, we can.
Speaker 4 (02:47):
Fly in and out of Iran at will, so it
would be a terrible mistake of Iran retaliates. But that's
not our goal. We are not declaring war in Iran.
We're not looking for war and Iran. But if they
attack us, then I think we have capabilities they having
them see yet it would be a terrible mistake on
their part, and frankly, it's not what we hope for
a wish.
Speaker 2 (03:04):
Marco Rubio's comments came as major US city's titan security
following the US strikes. While officials cited no credible threats
at this time, police in New York, Washington, DC, and
Los Angeles have increased patrols at religious institutions, diplomatic facilities,
and in public spaces. While addressing the nation late on Saturday,
(03:28):
US President Donald Trump said that Iran's key nuclear enrichment
facilities have been completely and totally obliterated. However, the effectiveness
of the strike, dubbed Operation Midnight Hammer, appears to be
less clear. When asked for more details on the success
of the attacks. During NBC's Meet the Press, the US
(03:49):
Vice President JD. Vans was less definitive in his assessment
than President Trump.
Speaker 6 (03:56):
He set the Iranian nuclear program back substantially last night.
Whether it's years or beyond that, we know it's going
to be a very long time before Iran can even
build a nuclear weapon if they want to.
Speaker 2 (04:09):
Vance's comments on Meet the Press came as US Air
Force General Dan Kane told a press conference that the
assessment of quote final battle damage will take some time.
Satellite images taken on Sunday of the Foudau and Natans
sites show new craters and possibly collapse tunnel entrances, but
(04:30):
they do not offer conclusive evidence that the attack breached
the underground facilities. Now adding to those comments, the Israeli
Prime Minister Benjamin Netnier, who said that the US air
strike delivered a great deal of damage, but the full
extent is not yet known. Nenia, who made the remarks
during a news conference in which he pledged to continue
(04:51):
Israel's military campaign in both Iran and the Gaza Strip.
Speaker 7 (04:55):
Congratulations, President Trump, your bold decision to target Iran's nuclear
facilities with the awesome and righteous mind of the United
States will change.
Speaker 2 (05:06):
History, Israel's Prime Minister Netnyahu, speaking there as the UN
Nuclear inspectors from the IAEA have reported that they have
not been able to verify the location of Iran's stockpile
of near bomb grade uranium for more than a week.
Iranian officials recently acknowledge breaking IAEA seals and moving the
(05:28):
material to an undisclosed location. Meanwhile, in a post on
social media, the EU's top diplomat, Kakallos urged quote all
sides to step back, return to the negotiating table and
prevent further escalation, adding that Iran must not be allowed
to develop a nuclear weapon. Britain says that his military
(05:50):
was not involved in the US operation, but it expressed
support for its results. UK officials said that they received
advance warning from Washington about the strikes. Business Secretary Jonathan
Reynolds says that Iran is a major threat to the
UK and to the wider world, not just to the
Middle East.
Speaker 8 (06:08):
So I think this is just a benign theocratic dictatorship keeping.
Speaker 5 (06:12):
Itself to itself.
Speaker 8 (06:12):
No, and there is simply no way a responsible British
government would ever allow that country to possess nuclear weapon.
I wanted a different way to obtain this, but I
cannot pretend to you that the prevention of Iran having
a nuclear weapon is anything other than the interests of
this country.
Speaker 2 (06:26):
Reynolds also pushed back on comparisons to the invasion of
Iraq more than twenty years ago. President trump strikes have
put the UK and other key US allies in a
difficult position. They want to maintain key economic and military
ties without being dragged into a war in the region.
Oil prices surged after the US stock Iraq's nuclear sites,
(06:48):
stoking concerns of energy supply disruption. Global benchmark Brent CREWD
rose as much as five point seven percent to eighty
one dollars forty the bow before pairing those gains. Matt
Gerzkin is chief geopolitical strategist at BCA Research. He told
Bloomberg that prices could go even higher.
Speaker 9 (07:09):
If Hormoz is claused, or if shipping in other ways
is blocked, or if Saudi Arabia is hit. Those are
last last gasp actions by Iran. But if they happen,
then of course we would start to move toward maybe
even a doubling of oil price. I mean definitely over
one hundred per barrel.
Speaker 2 (07:27):
BCA Research is Matt Gertkin speaking there. The news comes
as Bloomberg data showed two empty supertankers capable of transporting
around two million barrels of crude you turned in the
Strait of Hormuz after the strikes. The vessels changed course
on Sunday, sailing south away from the mouth of the
Persian Gulf. And global aviation is also facing increased disruption
(07:52):
after the latest developments in the Middle East. That's after
several American and European airlines paused flights to the UAE
and cut up. Bloomberg's Tea Adebayo has the details there.
Speaker 10 (08:03):
British Airways and Singapore Airlines have halted flights to the
Persian Gulf as the industry adjusted growing tension in the
Middle East. The UK based carrier canceled several trips to
Dubai and diverted two planes bound for the Emirate overnight.
That's according to data from flight Radar twenty four. Meanwhile,
Singapore's National Airlines said it canceled two flights to Dubai
(08:26):
on Sunday, warning of more disruption as the situation remains.
Speaker 5 (08:29):
Quote fluid.
Speaker 10 (08:31):
The moves highlight growing concerns about an area of the
region typically considered safe and sheltered from regional conflict. In London,
Tea at a Bayo, Bloomberg raised you.
Speaker 2 (08:42):
So those are our top stories. Let's get to the
markets now. So we mentioned that crude oil had surged
at the beginning of trading on Monday. We've pared back
some of that six percent gain. Break Croud futures at
seventy seven dollars eighty seven, the bow up by one
point one percent. Bloomberg intelligences one hundred dollars oil and
greater volatility if Tehran doesn't make peace with Israel. The
(09:04):
dollar has also gapped higher. We're up four tenths of
one percent on the Bloomberg Dollar Spot Index this morning.
Stop futures for Europe are sinking half of one percent.
SMP five eminis also down two tenths of one percent
this morning. Gold, though erase the games that we saw earlier.
We are now down three tenths of one percent three thousand,
three hundred and fifty nine dollars. The euro is also softer.
(09:27):
The Japanese end down seven tenths of one percent this morning,
and Bitcoin currently trading at above one hundred and one
thousand dollars, up by one point eight percent. As for
the bond markets, tenure US yields upper basis point only
one basis point at four thirty nine. So those are
the markets. In a moment, we're going to bring you,
of course, in depth coverage of the geopolitical reaction to
(09:50):
the US strikes in the Middle East. We will assess
the impact on Iraq's nuclear program and also dig into
the possible repercussions for the global energy market. But before
we get to all of our correspondence and reporters on
this very important morning, I want to bring you some
of the in depth thinking that has been done around
what has happened this weekend, and I'd like to point
(10:13):
you towards Bloomberg's Andres Kluth. He's one of our opinion
columnists talking about Midnight Hammer. It counts as a stunning triumph,
But tactics are one thing, strategy is another. Kluth points
out the dangers of Hubris, who hasn't perhaps thought of
that over this weekend, the ominous echoes as Andreas mentions
of previous American presence, prematurely proclaiming mission accomplished? Is it
(10:38):
mission accomplished here? You know? Obviously it doesn't seem to
be that way. Mark Champion's also been writing in depth
about whether actually the future now is in the hands
of Iran's clerics a President Trump claiming near magical powers
for ending and preventing wars. According to Mark Champion, but
Israel cornered the US president and into joining this war.
(11:01):
So he talks about the various paths that he sees ahead.
Is America going to be successful in this war? Will
Era's nuclear program be obliterated? What happens if there is
instability or maybe regime change in Iran? So have a
read of those two in depth Bloomberg opinion pieces. They
(11:21):
come highly recommended if you want more in depth thinking
on this story. For now, though it is just over
twenty four hours since the US air strikes on Eram's
nuclear program, the Islamic Republic has warned of retaliation. Brent
oil has rallied as much as five point seven percent
at the open this morning. But we are at another
(11:43):
hugely perilous moment, it would seem in the Middle East
joining me now. In Bloomberg's EMEA News director Roslin Matheson Roz,
Good morning. How successful? Firstly, do we think that these
US strikes were on four Dough Natans and Isfahan. Surely
that's the most important first thought.
Speaker 11 (12:03):
Well, and that is an important thought, But we don't
really know. As you say, this was an extensive US operation,
the first confirmed use in combat of these bunker buster
bombs called massive ordinance penetrator bombs, seems to be an
operation largely carried out by the US on its own,
without assistance from the UK, Europe and elsewhere. And the
(12:28):
question is did they actually achieve the goal of Donald
Trump says they basically obliterated these sites. They did damage
deep underground in these key nuclear facilities. The reality is
at this stage we just don't know. For now, the
UN nuclear monitors are saying, no one knows the condition
(12:48):
of these facilities, particularly the four Dah facility. There's been
no significant leak of radiation obviously, and they don't know
most importantly exactly where the highest enriched U of iran is.
It's quite possible they'd been moving that around within their sites.
That's more than four hundred kilograms of uranium and rich
(13:08):
to sixty percent, and they seem to have lost track
of it, and so the question is did this do
damage enough to these sites to stop them being able
to operate for a short period of time for a
long period of time, do they know where the uranium is?
As is meant that Iran is unable to accelerate if
it wanted to the production of a nuclear weapon. It's
very unclear at this point how much damage was done
(13:31):
and so therefore was this operation truly successful if that
was the singular goal.
Speaker 2 (13:37):
Indeed, now Iran's allies like Harmus and Hezbolla are severely weakened.
But Iran could disrupt oil supplies, It could retaliate how
and what is the expectation on retaliation.
Speaker 11 (13:50):
Well, obviously Iran says they reserve the right to retaliate
in whatever way they see fit.
Speaker 5 (13:56):
They haven't done anything significant so far.
Speaker 11 (13:58):
They're probably drawing brad and trying to work out how
to calibrate a response. I mean, it's very clear they
can't just let this go by. This was the US
striking directly at the heart of Iran. But equally, this
is a regime that has suffered quite a lot of
losses in its leadership, in its military.
Speaker 5 (14:17):
As you say in some.
Speaker 11 (14:18):
Of its proxies, particularly Hesbalah, which was always at the
top of.
Speaker 5 (14:23):
The line for Iran. So what are the options.
Speaker 11 (14:27):
It can disrupt shipping again, the Huthi's have worn they'll
do that. It could close the Strait of Hermus, which
is a key waterway for the oil trade, although that
would be quite self defeating for Iran equally in terms
of its own economy, which is already on its knees.
Speaker 5 (14:43):
That would have a big impact on global all supply
as well.
Speaker 11 (14:47):
It could try and attack US military sites in the region,
and that just leads to an even bigger regional conflict.
It can carry out cyber attacks. It's very good at
doing those, actually, so you could see some cyber action.
But all of it is about saying, what is the
message that we can send if you're Iran that responds
to this without possibly tipping it into an even bigger war.
Speaker 2 (15:11):
Indeed, and to that point, what has been the reaction
around the world to this? I mean, there's President Trump
saying that Iran must make peace. Does this mean peace,
does it mean regime change? Or indeed does one Trump
ally called it the Third World War? What is the
geopolitical reaction?
Speaker 11 (15:30):
Well, It's interesting to see quite a few countries obviously
expressing concern about the situation, but not racing to support Iran,
equally distancing themselves a bit from the US in all
of this. Again, the UK, France, others saying we had
nothing to do with these strikes. Countries in the region,
the Gulf stakes obviously very concerned about the potential for escalation,
(15:52):
urging a return some way to talks, although that seems
to be very difficult at the moment. And in the end,
what is it that Israel and the UA want in this?
As you say, people throw the words regime change around
all the time.
Speaker 5 (16:05):
Does Israel want that? Does the US want that? I mean?
Speaker 11 (16:08):
Donald Trump last night said in a tweet that, you know,
if the current regime is unable to make around great again,
why wouldn't there be regime change. That's even as other
US officials are saying, hang on, we're not looking for that,
it seems to be they're saying, well, if these circumstances
create the environment for regime change at home with the
Iranian people, then that's not a bad thing. There's no
(16:30):
sign the Uranian people are stepping away from the regime
at the moment. There's probably more of a rally around
the flag thing going on, even a regime that many
Iranians don't like. But the question is, if you're pushing
for that for regime change, what would you be left
with afterward, because there are plenty of examples around the
world where regime change has not gone particularly well.
Speaker 2 (16:52):
Indeed, Wells, thank you so much for being with us
and forgiving us your thoughts. Bunting Bag's EMEA news director
ros In Matheson, Well, I want to move straight on
and talk about President Trump talking about this bullseye moment.
But the United Nations Atomic Watchdog says that it sees
no radioactive contamination and as Roz was mentioning, it doesn't
(17:12):
know where Iran's four hundred kilograms of enriched uranium is
right now. Jonathan Tyrone, who covers nuclear diplomacy for Bloomberg,
joins us now for more. Jonathan, good morning, and thanks
for your time. What do we know about Iran's nuclear
program now? The capacity to make a bomb.
Speaker 12 (17:32):
Well significant them. It has been dealt to the future
capacity of Iran to make new uranium. However, the bombing
did not account for the inventory of existing uranium We
first reported five days ago that the IAEA had lost
track of the four hundred and nine kilograms of AILE
enriched uranium that's equivalent to en bomb's worth of material
(17:52):
that could be enriched to weapons grade. We still don't
know where that is, and the success or failure of
this military operation may well hinge on whether that can
be safely accounted for, because without doing that, the possibility
is going to exist that Iran has a clandestine facility
(18:12):
that we don't know about. And let me just click
the add I mean, what just happened is like the
proverbial person looking for their keys underneath the light pole
bombing the light because we bombed the places where inspections
were undergoing. We attacked the places where inspectors were And
(18:35):
just for context, the nuclear proliferation has always taken place
in clandestine locations, not declared locations under safeguards. So we
have really entered new uncharted territory here.
Speaker 2 (18:48):
Yeah, India, Pakistan, North Korea all developed nuclear weapons, even
the US.
Speaker 12 (18:53):
I mean, I mean the Manhattan Project was the greatest
secrecy event in Western history arguably. I mean, we developed
the nuclear weapon that was tested in nineteen forty five
in secret. So I mean you know, this is how
this is how proliferation occurs in secrecy, not declared sites
that are under international monitoring, with monitors keeping gram level
(19:15):
back over the style material and right now we've disrupted
that model.
Speaker 2 (19:20):
Okay. Yeah, although I don't know at the time of
the Manhattan Project whether there would have been such a
structure for international oversight, but Jonathan, you will know better
than I. Look. In terms of the ia EA, they
have talked about this window of opportunity now after what
happened over the weekend, what do you make of that?
What they're asking for.
Speaker 12 (19:40):
The IEA is holding an emergency sessions Board of Governors
today and that will be the topic of conversation.
Speaker 2 (19:48):
Okay, In terms of the EU FIE ministers meeting today,
and also whether there's another path to diplomacy, what's your view.
Speaker 12 (19:56):
Look, Iran was attacked while it was in in diplomacy
in latant violation of the United Nations Charter, and it's
going to be hard to reboot that at this stage.
It's hard to see where productive diplomacy takes place at
(20:17):
this juncture. I think the best we can look for
is no further escalation.
Speaker 2 (20:23):
Okay, Jonathan, thank you so much for your time, Thank
you for being with me. Jonathan Tyrone covers a nuclear
diplomacy for Bloomberg, So my thanks to him. And in
terms of the next stages, oil markets remain on edge breakthrough,
opening almost six percent high this morning. There are concerns
about the Strait of holl Moves. Iran's parliament call for
(20:43):
the waterway to be closed, according to Press TV on Sunday.
So joining us this morning is Stephen Stepcinski, who leads
our energy coverage in Asia. Stephen, good morning. The price
of oil seems to be holding at least it has
retreated from that high ste are at the start of trading.
We're now trading at seventy seven dollars. About how concerned
(21:04):
though are oil traders?
Speaker 13 (21:07):
I mean, there is certainly a concern, but there's a
difference between you know, are you concerned this? You know
there is a risk premium the market. We're ten percent
higher than we were before Israel began the strikes about
a week and a half ago. But then there's are
you concerned about the Strait of horror Moves actually being shut?
And if they were actually concerned about that? According to
Goldman and other banks, oil prices would be closer to
(21:29):
one hundred and thirty dollars instead of about seventy seven.
So there is there is some concern, but I think
it is still a remote risk for many in the market.
I think immediately after the US strike over the weekend,
there were some fears exactly how Iran would respond, and
maybe they would retaliate by hitting ships going through the strait,
(21:49):
maybe they would try to actually shut it. But the
only thing you have is a threat from Parliament, which
they've done before in the past. And it isn't Parliament
that decides who closes straight. It's the Supreme Leader of Iran,
It's the Security Council, you know it is. It is
not them. So this seems to be more of a
threat to see how the market will respond, and the
(22:10):
market is not really responding if we're only up about
like one point three percent today.
Speaker 2 (22:15):
So then I says, what are the risks? What could
they do? And what are people on watchful? Because there
are various efforts that could be made, you know, to
close the strait of hormoes or make it impossible for
commercial and oil tankers to actually pass. What do you
think trade is are now on watchful in the coming
few hours and days.
Speaker 13 (22:37):
I think you know. One of the scenarios that I
think a lot of the traders are looking for is
a similar approach to the Red Sea where the hu
thies were to target ships. Right so, Iran or Tehran
or organizations with connections to Iran could start to target
individual ships with rockets, with mines, with other other means
drones to hit ships going through that are connected to
(22:59):
the US, connect to the Israel or Western allies. That
is a scenario that could slow down, increase charter rates,
increase insurance rates, and make companies think twice before sending
their ships through. It would it would interrupt trade and
it could be problematic. It wouldn't result in the total closure,
maybe it's impossible totally close it, but it would it
would cause a disruption that would lead to higher prices.
(23:22):
That is one scenario I think that the market is
looking at. I think we're all so closely looking at
as these tit for tat attacks continue. If the US
were to strike Iran again, then then will they hit
oil infrastructure? Will iran An oil output be disrupted? That
would have an immediate impact on the oil market. Likewise,
will Iran look to hit oil infrastructure elsewhere, maybe in
(23:43):
Iraq or other places that could also physically take barrels
off the market, thus leading to higher prices. But clearly,
as you know, as we're talking about the Strait of
Horror moves, which is a conduit for basically the twenty
to thirty percent of oil trade, is the point that
the market is closely watching because if that is affected,
(24:05):
that has wide raging implications, not just for oil but
the global economy.
Speaker 2 (24:11):
Yeah, what do you think OPEK is going to be
thinking at this point and doing obviously IPEK including Russia
which is one of Iran's key allies.
Speaker 13 (24:21):
Yeah, I mean, how much more oil can they add
into the market? Right, So they've been adding barrels back
over the last few months, a lot in the market
thought that this wasn't needed, was kind of adding to
the glut. But now where we're in a situation where
potentially you could have curb supply from Saudi Arabia because
a lot of Saudi crub goes through the Strait of
Hormuz as well as others, maybe there will be other
(24:43):
countries stepping up to fill the gap. Now, if you're
taking thirty percent of seaborn crude trade off the market,
OPEK plus isn't able to come in and quickly replace
all of that. But if we're talking delays, maybe some
canceled shipments, that's a lot easier to die just and
take if other OPEC members kind of kind of step in.
(25:03):
So I think that's something that will be discussed, as
well as just pressuring Around and others to not close it,
because clearly they want around to have a measured approach
here and closing the strait of hormones doesn't help anyone
in the region.
Speaker 1 (25:22):
This is Bloomberg Daybreak Europe, your morning brief on the
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Speaker 2 (25:28):
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Speaker 12 (25:55):
Europe
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:10):
This is the Bloomberg Daybreak cur podcast, available every morning
on Apple, Spotify or wherever you listen. It's Monday, the
twenty third of June. Here in London, I'm Caroline Hepka.
Coming up today. Iran warns all options for retaliation are
on the table following US strikes on its nuclear facilities.
Questions grow over President Trump's claimed that the attack totally
(00:32):
obliterated tey RAN's atomic program and crude spikes as two
supertankers U turn in the strait of Hall moves and
market's watch for signs of escalation. Let's start with a
roundup of our top stories. Unprecedented US air strikes against
Iran's nuclear facilities over the weekend have set traders and
(00:52):
governments across the globe on edge. The large scale American
operation targeted nuclear facilities at four dough Natal and Isfahan
in a thirty seven hour operation that included one hundred
and twenty five aircraft, submarine launched Tomahawk missiles, and the
first combat use of the US's thirty thousand pounds massive
(01:14):
ordnance penetrator bombs. Iran's Atomic Energy Agency described the US
strikes as a savage assault, but pledged not to abandon
its own nuclear work and speaking yesterday, Iran's Foreign minster
Abbas Aracchi said all options for a response are on
the table.
Speaker 3 (01:33):
The United States itself has now also opted for a
dangerous military operation and aggression against the people of Iran.
In doing so, the US administrations holds soul and full
responsibility for the consequences of its actions, including the Islamic
Republic of Iran's right to self defense under the principles
(01:56):
of the United Charter.
Speaker 2 (01:58):
Those words from the Iranian fi minister were followed by
further comments from the country's ambassador to the UN, Amir Said.
Iravani told an Emergency Security Council meeting that the timing,
nature and scale of Tehran's response will be decided by
its armed forces well. The US has warned all American
(02:19):
citizens abroad to be wary of protests and travel disruption.
The State Department issued a worldwide caution alert after the strikes,
saying in a statement, there is the potential for demonstrations
against US citizens and interests abroad. And on Fox News
Sunday's Morning Futures program, US sectory of Saint Marco Rubio
(02:40):
warned Iran against retaliation.
Speaker 4 (02:43):
If they retaliate, it'll be the worst mistake they've ever made.
Speaker 5 (02:46):
Look, we can.
Speaker 4 (02:47):
Fly in and out of Iran at will, so it
would be a terrible mistake of Iran retaliates. But that's
not our goal. We are not declaring war in Iran.
We're not looking for war and Iran. But if they
attack us, then I think we have capabilities they having
them see yet it would be a terrible mistake on
their part, and frankly, it's not what we hope for
a wish.
Speaker 2 (03:04):
Marco Rubio's comments came as major US city's titan security
following the US strikes. While officials cited no credible threats
at this time, police in New York, Washington, DC, and
Los Angeles have increased patrols at religious institutions, diplomatic facilities,
and in public spaces. While addressing the nation late on Saturday,
(03:28):
US President Donald Trump said that Iran's key nuclear enrichment
facilities have been completely and totally obliterated. However, the effectiveness
of the strike, dubbed Operation Midnight Hammer, appears to be
less clear. When asked for more details on the success
of the attacks. During NBC's Meet the Press, the US
(03:49):
Vice President JD. Vans was less definitive in his assessment
than President Trump.
Speaker 6 (03:56):
He set the Iranian nuclear program back substantially last night.
Whether it's years or beyond that, we know it's going
to be a very long time before Iran can even
build a nuclear weapon if they want to.
Speaker 2 (04:09):
Vance's comments on Meet the Press came as US Air
Force General Dan Kane told a press conference that the
assessment of quote final battle damage will take some time.
Satellite images taken on Sunday of the Foudau and Natans
sites show new craters and possibly collapse tunnel entrances, but
(04:30):
they do not offer conclusive evidence that the attack breached
the underground facilities. Now adding to those comments, the Israeli
Prime Minister Benjamin Netnier, who said that the US air
strike delivered a great deal of damage, but the full
extent is not yet known. Nenia, who made the remarks
during a news conference in which he pledged to continue
(04:51):
Israel's military campaign in both Iran and the Gaza Strip.
Speaker 7 (04:55):
Congratulations, President Trump, your bold decision to target Iran's nuclear
facilities with the awesome and righteous mind of the United
States will change.
Speaker 2 (05:06):
History, Israel's Prime Minister Netnyahu, speaking there as the UN
Nuclear inspectors from the IAEA have reported that they have
not been able to verify the location of Iran's stockpile
of near bomb grade uranium for more than a week.
Iranian officials recently acknowledge breaking IAEA seals and moving the
(05:28):
material to an undisclosed location. Meanwhile, in a post on
social media, the EU's top diplomat, Kakallos urged quote all
sides to step back, return to the negotiating table and
prevent further escalation, adding that Iran must not be allowed
to develop a nuclear weapon. Britain says that his military
(05:50):
was not involved in the US operation, but it expressed
support for its results. UK officials said that they received
advance warning from Washington about the strikes. Business Secretary Jonathan
Reynolds says that Iran is a major threat to the
UK and to the wider world, not just to the
Middle East.
Speaker 8 (06:08):
So I think this is just a benign theocratic dictatorship keeping.
Speaker 5 (06:12):
Itself to itself.
Speaker 8 (06:12):
No, and there is simply no way a responsible British
government would ever allow that country to possess nuclear weapon.
I wanted a different way to obtain this, but I
cannot pretend to you that the prevention of Iran having
a nuclear weapon is anything other than the interests of
this country.
Speaker 2 (06:26):
Reynolds also pushed back on comparisons to the invasion of
Iraq more than twenty years ago. President trump strikes have
put the UK and other key US allies in a
difficult position. They want to maintain key economic and military
ties without being dragged into a war in the region.
Oil prices surged after the US stock Iraq's nuclear sites,
(06:48):
stoking concerns of energy supply disruption. Global benchmark Brent CREWD
rose as much as five point seven percent to eighty
one dollars forty the bow before pairing those gains. Matt
Gerzkin is chief geopolitical strategist at BCA Research. He told
Bloomberg that prices could go even higher.
Speaker 9 (07:09):
If Hormoz is claused, or if shipping in other ways
is blocked, or if Saudi Arabia is hit. Those are
last last gasp actions by Iran. But if they happen,
then of course we would start to move toward maybe
even a doubling of oil price. I mean definitely over
one hundred per barrel.
Speaker 2 (07:27):
BCA Research is Matt Gertkin speaking there. The news comes
as Bloomberg data showed two empty supertankers capable of transporting
around two million barrels of crude you turned in the
Strait of Hormuz after the strikes. The vessels changed course
on Sunday, sailing south away from the mouth of the
Persian Gulf. And global aviation is also facing increased disruption
(07:52):
after the latest developments in the Middle East. That's after
several American and European airlines paused flights to the UAE
and cut up. Bloomberg's Tea Adebayo has the details there.
Speaker 10 (08:03):
British Airways and Singapore Airlines have halted flights to the
Persian Gulf as the industry adjusted growing tension in the
Middle East. The UK based carrier canceled several trips to
Dubai and diverted two planes bound for the Emirate overnight.
That's according to data from flight Radar twenty four. Meanwhile,
Singapore's National Airlines said it canceled two flights to Dubai
(08:26):
on Sunday, warning of more disruption as the situation remains.
Speaker 5 (08:29):
Quote fluid.
Speaker 10 (08:31):
The moves highlight growing concerns about an area of the
region typically considered safe and sheltered from regional conflict. In London,
Tea at a Bayo, Bloomberg raised you.
Speaker 2 (08:42):
So those are our top stories. Let's get to the
markets now. So we mentioned that crude oil had surged
at the beginning of trading on Monday. We've pared back
some of that six percent gain. Break Croud futures at
seventy seven dollars eighty seven, the bow up by one
point one percent. Bloomberg intelligences one hundred dollars oil and
greater volatility if Tehran doesn't make peace with Israel. The
(09:04):
dollar has also gapped higher. We're up four tenths of
one percent on the Bloomberg Dollar Spot Index this morning.
Stop futures for Europe are sinking half of one percent.
SMP five eminis also down two tenths of one percent
this morning. Gold, though erase the games that we saw earlier.
We are now down three tenths of one percent three thousand,
three hundred and fifty nine dollars. The euro is also softer.
(09:27):
The Japanese end down seven tenths of one percent this morning,
and Bitcoin currently trading at above one hundred and one
thousand dollars, up by one point eight percent. As for
the bond markets, tenure US yields upper basis point only
one basis point at four thirty nine. So those are
the markets. In a moment, we're going to bring you,
of course, in depth coverage of the geopolitical reaction to
(09:50):
the US strikes in the Middle East. We will assess
the impact on Iraq's nuclear program and also dig into
the possible repercussions for the global energy market. But before
we get to all of our correspondence and reporters on
this very important morning, I want to bring you some
of the in depth thinking that has been done around
what has happened this weekend, and I'd like to point
(10:13):
you towards Bloomberg's Andres Kluth. He's one of our opinion
columnists talking about Midnight Hammer. It counts as a stunning triumph,
But tactics are one thing, strategy is another. Kluth points
out the dangers of Hubris, who hasn't perhaps thought of
that over this weekend, the ominous echoes as Andreas mentions
of previous American presence, prematurely proclaiming mission accomplished? Is it
(10:38):
mission accomplished here? You know? Obviously it doesn't seem to
be that way. Mark Champion's also been writing in depth
about whether actually the future now is in the hands
of Iran's clerics a President Trump claiming near magical powers
for ending and preventing wars. According to Mark Champion, but
Israel cornered the US president and into joining this war.
(11:01):
So he talks about the various paths that he sees ahead.
Is America going to be successful in this war? Will
Era's nuclear program be obliterated? What happens if there is
instability or maybe regime change in Iran? So have a
read of those two in depth Bloomberg opinion pieces. They
(11:21):
come highly recommended if you want more in depth thinking
on this story. For now, though it is just over
twenty four hours since the US air strikes on Eram's
nuclear program, the Islamic Republic has warned of retaliation. Brent
oil has rallied as much as five point seven percent
at the open this morning. But we are at another
(11:43):
hugely perilous moment, it would seem in the Middle East
joining me now. In Bloomberg's EMEA News director Roslin Matheson Roz,
Good morning. How successful? Firstly, do we think that these
US strikes were on four Dough Natans and Isfahan. Surely
that's the most important first thought.
Speaker 11 (12:03):
Well, and that is an important thought, But we don't
really know. As you say, this was an extensive US operation,
the first confirmed use in combat of these bunker buster
bombs called massive ordinance penetrator bombs, seems to be an
operation largely carried out by the US on its own,
without assistance from the UK, Europe and elsewhere. And the
(12:28):
question is did they actually achieve the goal of Donald
Trump says they basically obliterated these sites. They did damage
deep underground in these key nuclear facilities. The reality is
at this stage we just don't know. For now, the
UN nuclear monitors are saying, no one knows the condition
(12:48):
of these facilities, particularly the four Dah facility. There's been
no significant leak of radiation obviously, and they don't know
most importantly exactly where the highest enriched U of iran is.
It's quite possible they'd been moving that around within their sites.
That's more than four hundred kilograms of uranium and rich
(13:08):
to sixty percent, and they seem to have lost track
of it, and so the question is did this do
damage enough to these sites to stop them being able
to operate for a short period of time for a
long period of time, do they know where the uranium is?
As is meant that Iran is unable to accelerate if
it wanted to the production of a nuclear weapon. It's
very unclear at this point how much damage was done
(13:31):
and so therefore was this operation truly successful if that
was the singular goal.
Speaker 2 (13:37):
Indeed, now Iran's allies like Harmus and Hezbolla are severely weakened.
But Iran could disrupt oil supplies, It could retaliate how
and what is the expectation on retaliation.
Speaker 11 (13:50):
Well, obviously Iran says they reserve the right to retaliate
in whatever way they see fit.
Speaker 5 (13:56):
They haven't done anything significant so far.
Speaker 11 (13:58):
They're probably drawing brad and trying to work out how
to calibrate a response. I mean, it's very clear they
can't just let this go by. This was the US
striking directly at the heart of Iran. But equally, this
is a regime that has suffered quite a lot of
losses in its leadership, in its military.
Speaker 5 (14:17):
As you say in some.
Speaker 11 (14:18):
Of its proxies, particularly Hesbalah, which was always at the
top of.
Speaker 5 (14:23):
The line for Iran. So what are the options.
Speaker 11 (14:27):
It can disrupt shipping again, the Huthi's have worn they'll
do that. It could close the Strait of Hermus, which
is a key waterway for the oil trade, although that
would be quite self defeating for Iran equally in terms
of its own economy, which is already on its knees.
Speaker 5 (14:43):
That would have a big impact on global all supply
as well.
Speaker 11 (14:47):
It could try and attack US military sites in the region,
and that just leads to an even bigger regional conflict.
It can carry out cyber attacks. It's very good at
doing those, actually, so you could see some cyber action.
But all of it is about saying, what is the
message that we can send if you're Iran that responds
to this without possibly tipping it into an even bigger war.
Speaker 2 (15:11):
Indeed, and to that point, what has been the reaction
around the world to this? I mean, there's President Trump
saying that Iran must make peace. Does this mean peace,
does it mean regime change? Or indeed does one Trump
ally called it the Third World War? What is the
geopolitical reaction?
Speaker 11 (15:30):
Well, It's interesting to see quite a few countries obviously
expressing concern about the situation, but not racing to support Iran,
equally distancing themselves a bit from the US in all
of this. Again, the UK, France, others saying we had
nothing to do with these strikes. Countries in the region,
the Gulf stakes obviously very concerned about the potential for escalation,
(15:52):
urging a return some way to talks, although that seems
to be very difficult at the moment. And in the end,
what is it that Israel and the UA want in this?
As you say, people throw the words regime change around
all the time.
Speaker 5 (16:05):
Does Israel want that? Does the US want that? I mean?
Speaker 11 (16:08):
Donald Trump last night said in a tweet that, you know,
if the current regime is unable to make around great again,
why wouldn't there be regime change. That's even as other
US officials are saying, hang on, we're not looking for that,
it seems to be they're saying, well, if these circumstances
create the environment for regime change at home with the
Iranian people, then that's not a bad thing. There's no
(16:30):
sign the Uranian people are stepping away from the regime
at the moment. There's probably more of a rally around
the flag thing going on, even a regime that many
Iranians don't like. But the question is, if you're pushing
for that for regime change, what would you be left
with afterward, because there are plenty of examples around the
world where regime change has not gone particularly well.
Speaker 2 (16:52):
Indeed, Wells, thank you so much for being with us
and forgiving us your thoughts. Bunting Bag's EMEA news director
ros In Matheson, Well, I want to move straight on
and talk about President Trump talking about this bullseye moment.
But the United Nations Atomic Watchdog says that it sees
no radioactive contamination and as Roz was mentioning, it doesn't
(17:12):
know where Iran's four hundred kilograms of enriched uranium is
right now. Jonathan Tyrone, who covers nuclear diplomacy for Bloomberg,
joins us now for more. Jonathan, good morning, and thanks
for your time. What do we know about Iran's nuclear
program now? The capacity to make a bomb.
Speaker 12 (17:32):
Well significant them. It has been dealt to the future
capacity of Iran to make new uranium. However, the bombing
did not account for the inventory of existing uranium We
first reported five days ago that the IAEA had lost
track of the four hundred and nine kilograms of AILE
enriched uranium that's equivalent to en bomb's worth of material
(17:52):
that could be enriched to weapons grade. We still don't
know where that is, and the success or failure of
this military operation may well hinge on whether that can
be safely accounted for, because without doing that, the possibility
is going to exist that Iran has a clandestine facility
(18:12):
that we don't know about. And let me just click
the add I mean, what just happened is like the
proverbial person looking for their keys underneath the light pole
bombing the light because we bombed the places where inspections
were undergoing. We attacked the places where inspectors were And
(18:35):
just for context, the nuclear proliferation has always taken place
in clandestine locations, not declared locations under safeguards. So we
have really entered new uncharted territory here.
Speaker 2 (18:48):
Yeah, India, Pakistan, North Korea all developed nuclear weapons, even
the US.
Speaker 12 (18:53):
I mean, I mean the Manhattan Project was the greatest
secrecy event in Western history arguably. I mean, we developed
the nuclear weapon that was tested in nineteen forty five
in secret. So I mean you know, this is how
this is how proliferation occurs in secrecy, not declared sites
that are under international monitoring, with monitors keeping gram level
(19:15):
back over the style material and right now we've disrupted
that model.
Speaker 2 (19:20):
Okay. Yeah, although I don't know at the time of
the Manhattan Project whether there would have been such a
structure for international oversight, but Jonathan, you will know better
than I. Look. In terms of the ia EA, they
have talked about this window of opportunity now after what
happened over the weekend, what do you make of that?
What they're asking for.
Speaker 12 (19:40):
The IEA is holding an emergency sessions Board of Governors
today and that will be the topic of conversation.
Speaker 2 (19:48):
Okay, In terms of the EU FIE ministers meeting today,
and also whether there's another path to diplomacy, what's your view.
Speaker 12 (19:56):
Look, Iran was attacked while it was in in diplomacy
in latant violation of the United Nations Charter, and it's
going to be hard to reboot that at this stage.
It's hard to see where productive diplomacy takes place at
(20:17):
this juncture. I think the best we can look for
is no further escalation.
Speaker 2 (20:23):
Okay, Jonathan, thank you so much for your time, Thank
you for being with me. Jonathan Tyrone covers a nuclear
diplomacy for Bloomberg, So my thanks to him. And in
terms of the next stages, oil markets remain on edge breakthrough,
opening almost six percent high this morning. There are concerns
about the Strait of holl Moves. Iran's parliament call for
(20:43):
the waterway to be closed, according to Press TV on Sunday.
So joining us this morning is Stephen Stepcinski, who leads
our energy coverage in Asia. Stephen, good morning. The price
of oil seems to be holding at least it has
retreated from that high ste are at the start of trading.
We're now trading at seventy seven dollars. About how concerned
(21:04):
though are oil traders?
Speaker 13 (21:07):
I mean, there is certainly a concern, but there's a
difference between you know, are you concerned this? You know
there is a risk premium the market. We're ten percent
higher than we were before Israel began the strikes about
a week and a half ago. But then there's are
you concerned about the Strait of horror Moves actually being shut?
And if they were actually concerned about that? According to
Goldman and other banks, oil prices would be closer to
(21:29):
one hundred and thirty dollars instead of about seventy seven.
So there is there is some concern, but I think
it is still a remote risk for many in the market.
I think immediately after the US strike over the weekend,
there were some fears exactly how Iran would respond, and
maybe they would retaliate by hitting ships going through the strait,
(21:49):
maybe they would try to actually shut it. But the
only thing you have is a threat from Parliament, which
they've done before in the past. And it isn't Parliament
that decides who closes straight. It's the Supreme Leader of Iran,
It's the Security Council, you know it is. It is
not them. So this seems to be more of a
threat to see how the market will respond, and the
(22:10):
market is not really responding if we're only up about
like one point three percent today.
Speaker 2 (22:15):
So then I says, what are the risks? What could
they do? And what are people on watchful? Because there
are various efforts that could be made, you know, to
close the strait of hormoes or make it impossible for
commercial and oil tankers to actually pass. What do you
think trade is are now on watchful in the coming
few hours and days.
Speaker 13 (22:37):
I think you know. One of the scenarios that I
think a lot of the traders are looking for is
a similar approach to the Red Sea where the hu
thies were to target ships. Right so, Iran or Tehran
or organizations with connections to Iran could start to target
individual ships with rockets, with mines, with other other means
drones to hit ships going through that are connected to
(22:59):
the US, connect to the Israel or Western allies. That
is a scenario that could slow down, increase charter rates,
increase insurance rates, and make companies think twice before sending
their ships through. It would it would interrupt trade and
it could be problematic. It wouldn't result in the total closure,
maybe it's impossible totally close it, but it would it
would cause a disruption that would lead to higher prices.
(23:22):
That is one scenario I think that the market is
looking at. I think we're all so closely looking at
as these tit for tat attacks continue. If the US
were to strike Iran again, then then will they hit
oil infrastructure? Will iran An oil output be disrupted? That
would have an immediate impact on the oil market. Likewise,
will Iran look to hit oil infrastructure elsewhere, maybe in
(23:43):
Iraq or other places that could also physically take barrels
off the market, thus leading to higher prices. But clearly,
as you know, as we're talking about the Strait of
Horror moves, which is a conduit for basically the twenty
to thirty percent of oil trade, is the point that
the market is closely watching because if that is affected,
(24:05):
that has wide raging implications, not just for oil but
the global economy.
Speaker 2 (24:11):
Yeah, what do you think OPEK is going to be
thinking at this point and doing obviously IPEK including Russia
which is one of Iran's key allies.
Speaker 13 (24:21):
Yeah, I mean, how much more oil can they add
into the market? Right, So they've been adding barrels back
over the last few months, a lot in the market
thought that this wasn't needed, was kind of adding to
the glut. But now where we're in a situation where
potentially you could have curb supply from Saudi Arabia because
a lot of Saudi crub goes through the Strait of
Hormuz as well as others, maybe there will be other
(24:43):
countries stepping up to fill the gap. Now, if you're
taking thirty percent of seaborn crude trade off the market,
OPEK plus isn't able to come in and quickly replace
all of that. But if we're talking delays, maybe some
canceled shipments, that's a lot easier to die just and
take if other OPEC members kind of kind of step in.
(25:03):
So I think that's something that will be discussed, as
well as just pressuring Around and others to not close it,
because clearly they want around to have a measured approach
here and closing the strait of hormones doesn't help anyone
in the region.
Speaker 1 (25:22):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 2 (25:28):
Look for us on your podcast feed every morning, on Apple, Spotify,
and anywhere else you get your podcasts.
Speaker 1 (25:34):
You can also listen live each morning on London Dab Radio,
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Speaker 2 (25:40):
Our flagship New York station is also available on your
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Speaker 1 (25:49):
And I'm Stephen Carroll. Join us again tomorrow morning for
all the news you need to start your day right
here on Bloomberg day Break.
Speaker 12 (25:55):
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